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I wish I could tell the over 15 million older workers in the U.S. when the recession will hit so that the half of them with significant retirement assets can time the market and protect their nest egg. But really, the best advice comes from 12-step programs – know what you can control and what you can’t. Ignore all feelings of panic and temptation to control asset prices with market timing – like ignore this essay about the next recession. And keep your wealth diversified: 40-ish percent in stock, 40-ish percent in cash and bonds, and 20 percent-ish in home equity, which is part equity and part consumption (you gotta live somewhere).

As promised, I’d like to share more details supporting my speculation. With my team at the Schwartz Center for Economic Policy Analysis (SCEPA) in the The New School’s economics department, we found that the black/white unemployment gap might become a predictor of downturns.

In the aftermath of the recession in 2003, the black unemployment rate for older workers was 6.8%, 2.9 percentage points greater than the older white unemployment rate of 3.9%. By the time that expansion peaked in December 2007, signaling the start of the Great Recession, unemployment rates dropped to 4.2% for black older workers and 3.3% for white older workers, narrowing the racial jobs gap to 0.9 percentage points. When unemployment increased again in 2011, black older workers’ unemployment rate grew to 10.1%, 3.6 percentage points higher than white older workers at 6.5% - the largest gap in the past 15 years. As of February 2018, almost 11 years since the last round of low unemployment rates, the racial unemployment gap has once again narrowed to a gap of just 1.1 percentage points.

Economic growth shrinks the racial gap in unemployment for a number of reasons. When workers are scarce, employers relax hiring practices that have discriminatory effects. In recessions, the racial unemployment rate gap grows because older black workers lose their jobs faster than older white workers.